Each company has agreed to contribute up to $250 million to the 50-50 joint venture that will build large shopping centres, some surpassing 1 million square feet, and be anchored by hypermarkets that Reliance will own and operate
August 14, 2008
Source: Mint
Spencer’s, the Rs 800-crore retail arm of the RPG Group, is set to roll out the international Ladybird range of children’s wear, owned by the British high-street retail chain Woolworths in India in the next two weeks.
Spencer’s has entered into a tie-up with the $6-billion UK retailer Woolworths to exclusively sell its select products through its nation-wide chain in the country. The Indian retailer has a slew of private labels in the garment segment that include Island Monks and Mark Nicolas in the men’s and women casual/formal wear, Puddles for infants and Little Devils for kids below 14 years.
“We expect to have the Ladybird range of kids’ wear in our outlets in the next ten to 15 days,” Mr Harsh Goenka, Chairman of the RPG Group, told Business Line. This is part of Spencer’s move to increase focus on the apparel segment, which is domestically growing at a brisk pace.
Spencer’s has also tied up with Woolworths for exclusive distribution rights of the UK retailer’s international toy brand, Chad Valley. Initially, the company will be displaying Chad Valley toys in its hyper stores and in the next two months, the essential range would be available at the convenience stores.
Mr Goenka said the company has recently tied up with the US bakery café, Au Bon Pain, to unroll a chain of standalone outlets in the country. “This will be introduced by the end of this year,” he said.
Spencer’s has formed a joint venture called Novel Confectioners, which will be the master franchiser of Au Bon Pain (which means the place of good bread) in India. The Boston-based casual dining and bakery chain has more than 225 outlets fanned out across the US, South Korea, Taiwan and Thailand. The joint venture will set up 100 stores in the next 18-24 months with an outlay of Rs 50 crore, the first being planned in Bangalore over a 2,000- sq ft area by December this year. The stores will serve an assortment of breakfast and lunches such as soups, stews, sandwiches, sales, bread & bakery items, confectionaries and beverages.
Spencer’s currently has 400 stores across India with a total retail space of 14.27 lakh sq ft. It plans to increase the number of stores to 1,000 with a total retail space of 30- lakh sq ft by the end of the current fiscal, involving an investment of Rs 1,500 crore.
A company official said the focus would be more on large format stores. “Currently, we have 15 hyper stores and 12 supers, which are to go up to 45 and 30 respectively by the end of this fiscal. In terms of turnover, we are currently at Rs 800 crore and planning to touch the Rs 2,000-crore mark by this fiscal,” he said
Spencer’s will be sharpening its focus on private labels this year. In the private label programme, the retailer sources directly from the manufacturers and sells through its stores, which enables him to offer the products at lower price points. “We plan to increase the share of private label contribution from 25 per cent to 40 per cent in the next two years,” the official said.
August 5, 2008
Source: Hindu Business Line
Everyone loves a good discount. And it comes in as an incentive especially during times of inflation. For apparel discount retailers, inflation has proved to be a blessing. Arvind's branded discount retail chain Megamart has seen an improvement in walk-ins of 15% in the past few weeks.
"During inflation, customers always prefer to shop in a value retail outlet," says KE Venkatachalapathy, business head of Megamart. The increased footfall is reflecting in the sales figure of Megamart as well. While he refuses to divulge exact numbers, Venkatachalapathy says there has been a 20% increase in sales compared to the corresponding period last year. Discounts here vary from 10% to 30%.
"Inflation and discount retailing are directly proportional. Customers normally tend to flock to value retail stores where they are assured of good quality at reasonable prices," says Raghunath Narayanan, MD of Chennai discount retailer Europa.
Discount retailing, a post World War II phenomenon, is an established market practice in countries like the US. This concept is now picking in India, which is a price sensitive market. Discounts have always worked well with apparel and factory outlets in the suburbs of many Indian cities and shopping hubs like Fashion Street in Mumbai and Marathalli in Bangalore which acquired sobriquets as an export market bear testimony to this. Now inflation has come to the aid of retail majors.
The Loot, a discount chain, has seen footfalls increase by at least 10% in the last few weeks across its 35 stores in 15 cities. "In Mumbai alone, our footfalls are up by 17% in the last three weeks. In the first quarter, we had sales of Rs 15 crore. In the next quarter , we expect this to climb upto Rs 25 crore," says Jay Gupta, MD of The Loot.
In apparel, children's wear seem to be the biggest beneficiary. "As children, especially toddlers, normally outgrow their clothes pretty fast, parents are flocking to discount stores such as ours more than ever before," says Narayanan. While the discount offered by the apparel and luggage chain is between 25 and 30%, in kids wear it's 30%- 40%.
The consumer base is also widening. "From a largely middle class audience, I now see people getting out of cars like Honda Accord and Mercedes Benz outside our stores," says Gupta.
The rush to such outlets is also due to the fact that regular apparel retailers and multi-brand outlets mostly offer off season sale only twice in a year. "But in times of inflation and continued price rise, the consumer is looking to cut spends across categories on a daily basis," says Venkatachalapathy.
Brand Factory too has seen a 5%-7 % increase in our sales over the past few months. "While we cannot say that entirely due to inflation, we cannot rule out that it has played a role," says Vishnu Prasad, CEO of Brand Factory.
July 31, 2008
Source: Economic Times
Maharashtra FDA had earlier in the day suspended the retail chain’s licence in the state over hygiene issues at its warehouses.
source: Mint
14 Aug 2008
A report by international property consultants Cushman & Wakefield points to a paradoxical situation. There is demand for retail space in malls across major cities but nearly a fifth of the space lies vacant. The rentals, though, are stable and holding in specific markets. Despite major mall projects, the supply of space is likely to be low over the next two years as projects are being delayed due to various reasons.
The second quarter of 2008 saw the launch of just about a third of the planned launches in major cities. There was a supply of over 2 million sq.ft of mall space in major urban centres against a planned launch of 6 million sq.ft.
Most of the space during the second quarter has been created in the NCR, Mumbai and Kolkata, with nothing happening in Chennai, Hyderabad and Pune. The second and third quarters could see the supply of over 12 million sq.ft, according to a report by Cushman & Wakefield. The report, quoting Mr Rajneesh Mahajan, Director, Retail Services, Cushman & Wakefield, says that despite the low supply, nearly a fifth of the 40 million sq.ft of mall space is vacant. This is primarily because the businesses are targeting the same catchments resulting in oversupply within local markets. The focus is essentially on premium high streets.
Increasing input costs and global cash crunch have resulted in developers rescheduling project completion. New projects are also being held back in most cities in this quarter.
While quite a few planned mall projects are not likely to hit the market during the next year or two, the pressure for space on existing and emerging high streets will support rentals in prime high streets and prominent mall developments, according to the report.
In the next quarter Bangalore could see the supply of over 5.45 lakh sq.ft of mall space.
There is a pressure for space on the existing and emerging high streets in the city, which will continue to support the rents. Mall rentals have largely been stable across the markets, though some the traditional areas such as Commercial Street and Brigade have witnessed a 10 per cent appreciation in rents.
Mall rentals in Chennai are likely to strengthen because of poor supply. Major malls like Ampa and Coramandal which were to enter the market this year are more likely to start operations next year. Some of the planned mall space is likely to start in 2010. There is a clear dearth of quality real-estate solution to cater to the retailers' needs. "The prime cause for most of these delays is the hold on approvals coupled with construction delays. Indi mall, with approximately 170,000 sq.ft on Nelson Manickam Road, is the only mall expected to be operational during Q3 this year," says the report.
Hyderabad has not seen fresh supply of mall space during the second quarter. Rentals in select established main streets stabilised at the first quarter levels due to near-saturation in retail real-estate activity and absence of significant transactions. Most of the addition to the mall space has happened in the West and the North with Ahmedabad witnessing the launch of 3.50 lakh sq.ft mall on SG Highway. Retail development is happening actively on the western part of the city.
In Kolkata there has been a 50 per cent escalation in mall rentals over the last quarter at Rajarhat because of the lower price points vis-a-vis other areas and the potential development in the residential and commercial space in the vicinity. More than three-fourths of the addition to mall space is anticipated in Rajarhat. Over 3.70 lakh sq.ft of mall space has been added during the second quarter, the report said.
Mumbai will see the addition of 1.7 million sq.ft of mall space over the next six months across central suburban markets and Navi Mumbai.
Over 5.6 lakh sq.ft of mall space was added during the second quarter, when rentals remained stable with no change over the first quarter. In the NCR, mall space was primarily added in Faridabad and Gurgaon during the quarter when over 6.25 lakh sq.ft space was added. Mall and main street rentals have increased by over 24 per cent compared to the first quarter.
| Mall space | |
(sq.ft) | |
City | Estimated supply in 2008 |
Ahmedabad | 570,000 |
Bangalore | 813,000 |
Chennai | 170,000 |
Hyderabad | 700,000 |
Kolkata | 2,975,000 |
Mumbai | 3,870,000 |
NCR | 7,375,000 |
Pune | 300,000 |
(Source: Cushman & Wakefield) | |
August 3, 2008
Source: Hindu Business Line